I'm a freelance writer whose work has appeared in The Atlantic, The New York Times, The New Republic, IGN.com, Wired and more. I cover social games, video games, technology and that whole gray area that happens when technology and consumers collide. Google

How Sony's PS4 Beat The Xbox One On Price

SonySony‘s PS4 arguably has just one major advantage over MicrosoftMicrosoft‘s Xbox One: price. We in the hardcore gaming community can argue DRM and used games policies until we’re blue in the face, but those debates will fade when we’re faced with a mass market in the fall. When that happens, the non-blog reading consumer will be looking at two apparently similar machines with one major difference: one of them will be $100 less. When that consumer is making tough holiday buying decisions, every one of those dollars is bound to count.

So how did Sony manage to beat Microsoft on price? It’s not hard to see where Microsoft’s price padding is coming from. The company has been explicit about the Kinect as an essential piece of its vision for next-gen gaming, and as such, each console comes bundled with its highly sophisticated depth-sensing camera. Sony is also selling a camera, but as an add-on accessory, and according to a report from IGN, that wasn’t always the case. The site claims that Sony had originally planned to bundle the camera with the basic model PS4, and sell it for $499. In the months leading up to E3, the company made the decision to take the camera out, sell it for $59.99, and drop the price on the PS4.

We’ve reached out to Sony for comment. UPDATE: Sony Worldwide Studios Head Shuhei Yoshida confirmed the scoop via a tweet.

Right now, this is clearly the right decision for Sony. The audience met the price announcement with thunderous applause at E3, and the company is riding a wave of positive sentiment. So far, it would appear that all those nice thoughts are translating into pre-order sales. In the hardcore gaming community, the discussion is rarely about whether or not Microsoft’s Kinect is so game-changing it requires an extra $100 — rather, the Kinect is typically seen as a diversion at best and an omnipresent conduit for the NSA at the worst. I’d imagine that for many, losing out on the camera in exchange for $100 is a win-win.

Consumer Choice

Microsoft has never had a reputation for catering to the average consumer. You can see this corporate philosophy translated into the Kinect and the Xbox One — the company has a particular vision for the device, which is its right, but that vision isn’t what some consumers are looking for. Sony, on the other hand, lets the camera stand on its own. It will no doubt mean that fewer people end up with the camera, but it will also mean that everyone who bought it made a decision to do so.

IGN is highly critical of Sony’s decision to leave the camera out, saying that it’s bound to cripple the technology’s install base, scaring away any potential developers and rendering the move-enabled LED’s on every controller useless. You only have to look at the lackluster “playroom” demo from E3 to see how committed Sony is to the camera. Here’s IGN:

By relegating the camera to a $59.99 add-on, Sony has ensured the opposite — a climate of codependency wherein PlayStation 4 camera adoption will hinge upon compelling software, but compelling software will only arrive after PlayStation 4 camera adoption.

I’m not sure how well this holds up. The argument then becomes that a company should force consumers to buy an add-on with their main product, because no one would buy the add-on otherwise. It make some kind of sense from the broad perspective, where we’re concerned about grand trends in game design and the future of the industry, but it falls apart at the consumer level. There, the argument becomes: don’t make people buy things they don’t want.

Right now, it’s impossible to estimate the advantage that Sony gains by beating Microsoft on price, but I would guess it’s a considerable one, and it’s only going to become more important once more regular people start coming to that buying decision. After that, it’s a long game. It’s bound to be a long console generation. If Microsoft decides that bundling isn’t crucial to the future of its console, we could see a Kinect-less version of the Xbox One. If Microsoft can prove that the Kinect can make a serious and valuable difference in the way we use the Xbox One, the controversial camera could become an advantage.

For launch year, however, I think Sony has made the right call. Getting enough people to buy the console needs to be the first challenge — a camera can wait. Watch what Lewis Black has to say about the situation below.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

‘When that consumer is making tough holiday buying decisions, each one of those $100 is bound to count.’

this was my primary reason for thinking ps4 will have a much stronger holiday season then xbox one.

but then i realized, it really depends on how well ms informs the consumers of the xbox one’s non gaming features.

initially i felt well they are going to do a horrible job, just like their family share feature got turned into a DRM debate. which mind you DRM is identical on both consoles from the beginning and has not changed. only the digital sharing policies of the xbox one changed. if people understood how the digital sharing would effect them they would have realized how meaningless having a 24 hour check in and using approved retailers to sell used games would be. but ms didnt inform the consumers and we are stuck with an archaic system.

but then i remembered the xbox one reveal. how hard they pushed the non gaming side of xbox one. if they ramp that up with advertisements leading into the holiday season i think a lot of people won’t be too concerned with spending an extra $100.

if a mom or dad is looking to buy timmy a new console she will never use, then obviously they are going with the one that saves them $100. but when they see skype, motion controlled guides, tv meshed with netflix, etc. they may say hey ill actually use this device. that’s worth $100 to me.

I think that’s a real good point — mostly, as you say, for families. The question will be whether or not mom and dad will be able to look at those two consoles in a store and have been informed enough to know that one of them has more features geared to them.

Dude, DRM has NOT BEEN IDENTICAL ON BOTH CONSOLES FROM THE BEGINNING… if you’re not even informed on the basics, why bother getting into the conversation… MS just changed a ton to JUST RECENTLY MAKE THEM IDENTICAL… but not from the beginning…

Really it depends on how you look at it. The PS4 is really a gaming device that only gamers in the family will use most likely, but the Xbox One is meant for the whole family. The gamers can play their games, people interested in sports would love the Xbox One’s features for them, people can skype and watch movies (the PS4 can still watch movies). All in all, the PS4 is meant for gamers who just want to play their games, and watch movies, and the Xbox One is meant basically for the whole family to use. So people really wouldn’t mind spending a $100 more on a console if they want the entire family to use it. Also, the Xbox One just comes out before Black Friday, so you can get it at a super low price.

Good Point But Skype is overrated and Netflix is already on most Flat screen T.V’s.So them things are less of a factor when the Parents go and buy one which the price will be the finale factor. I don’t see people buying a console for extra hundred dollars with features on it that they already have at home on there cable box or T.V. And most people will buy the cheaper one that has the better games and Don’t have an eye looking at ya every time you sit down in front of it. That is X-Box 1 Flaw in a time when the NSA as already admitted they are spying on us.That can not be good for sales on the X-Box 1.!!!!!!!!

You contradict yourself in your own comment… You acknowledge that MS was going to utilize a 24-hour check-in (which is a form of DRM) and the Sony was not, yet you claim they had the same DRM policies from the beginning? Doesn’t make much sense.

I would argue you are looking way too deep into it. In all likelihood (and new coming out of places like Gamestop is confirming this) neither console is going to be readily available “on the shelves” this holiday season. I am sure just like with the PS3/360 release some retailers will stock up on some units to put in the sales flyers to get people into stores, but just like the previous generation launch there will be massive shortages and retailers will be selling any and all they can get.

Those that do not preorder now have very little chance of getting either console before Christmas unless they pay inflated prices on Ebay (I was selling Xbox360 units I pre-ordered for nearly $900 on ebay before Christmas in the last cycle).

That is why I think MS was smart in it’s pricing. It can always lower the price in Feb/March when supply catches up with demand.

The problem is that mom and dad wont be buying Timmy as many games as a hardcore gamer would buy himself. Microsoft is targeting the wrong demographics. So in the long run ps4 will have a bigger attachment rate then the Xbox one. And we all are aware that both Sony and Microsoft are selling their next gen consoles at a loss so Software sales will be the driving factor for both companies and if Sony manages to outsell Xbox one they would be able to recuperate their losses quicker and be profitable sooner then Microsoft which i do believe will happen since Sony is putting up a good fight in USA, they pretty much control the rest of the world market.

The non-gaming features seem like a huge stretch as selling points — especially in the first holiday season. Everyone that wants some kind of media streamer has one; replacing it with an Xbox isn’t compelling. The gesture and voice stuff looks great, but the cable-box integration is really going to be limited (DVR control won’t be part of the equation and this more or less has doomed GoogleTV to irrelevance).

I suspect that $100 is going to be huge for Sony; it was for Microsoft the last time around.

I just got paid $6784 working off my laptop this month. And if you think that’s cool, my divorced friend has twin toddlers and made over $9k her first month. It feels so good making so much money when other people have to work for so much less. This is what I do Going1.C0M

I don’t really get all this happy talk about X1′s digital sharing. While a neat feature, it is hardly so awesome that it is worth buying a console for. The 24 hour check-in I’m glad to see go. My ISP may go down, or as the Simcity launch shows us, MS’s server’s may go down, so frankly being unable to play even single-player games due to the internet being troublesome doesn’t sound like a win to me.

The rest of the stuff can be handled by other household devices for far less. I really dont’ think too many families will see those extra features and think they need to have an X1. Netflix? TVs, Blu-ray players, and the PS4 all come with that. If you have $500 to spend on a game console, I have a hard time believing you lack a device that can play Netflix already. Hardly a selling feature.

I would argue mom or dad doesn’t want to pay $60 a year to use Skype. Yes, Sony now requires a subscription of $50 a year, but it is only for Multiplayer online gaming. (Note some games like FTP will not require this subscription, free-to-play is completely free).

Applications, and any other video/music/browser programs will not require any subscription service aside from the individual subscription service cost itself, such as with Netflix or Hulu on the PS3. The XBOX line has always required Gold subs for use of any of these online features, and then it costs $10 more annually. At what point does mom or dad see that as a good alternative?

I’m also going to disagree with IGN’s reasoning. Anecdotal evidence only, but I remember when things like the rumble pack for the N64 controller and things like memory cards for the Playstation were simply nice extras. But eventually the people who played those consoles came to see the value in those extras and they were widely adopted. Now vibrating controllers and internal hard drives are taken for granted, and maybe a built in camera will be some day, but once companies start making worthwhile games that demonstrate the value of having these peripherals, then people will start flocking to them.

Rumble packs and memory cards are not the same, we are talking about developers risking the entire budget of their game on a small fragmented user base because not everyone has one. Programming some code to support a rumble feature was no big deal as the entire user base could still buy the games, whether they had a rumble pack or not.

Dave, Your missing some keys points. The PS4 comes with no video cam. XBOX one does. XBOX will have to release a console that comes without a cam. PS4 cam will cost between $60-$100. So the price war means nothing.

I would argue that you are missing the point. That is many consumers could not care less about the camera and will never “need” it. I am not yet so lazy I need to talk to my console or wave at it or whatever. I will do it the old fashioned way and pick up the remote……. however I am too lazy to use the Kinect for any of those games requiring me to run in place or wave my arms all around :)

So for those consumers like me (there are a lot of us) there is a legitimate $100 difference in price. I certainly will never buy a PS4 camera.

As I stated in other posts though I think MS made the right move for launch and we will see a price drop to be on par with PS4 within 6 months (once supply catches up with demand).

I want the Kinect and by the way SONY was pushing those ice-cream cone looking controllers hard with commercials for FPS games that never took off. Now XBOX360 has some games for the Kinect and Nike jumping on board with a fitness game. You have to admit that Sony abandoned the camera/motion fast.

My PS3 currently in my media room is no where near my display device, it’s in an audio cabinet with the receiver and cable box at the rear of my room. I like many others use a FPJ for a display device. Requiring a fixed camera located on my display is neither feasible or possible. I don’t want it, need it, and kudos to Sony to not make it mandatory.

Price has always been a big factor, the thing that makes it hard for me to judge is that although Xbox one is $100 more, at $399 and $499 they are both too expensive for mass maket adoption so it will kind of come down to who can get close to the $299 sweet spot first and if they have enogh momentum at that point.

The only thing I am sure of though is that whatever happens, by bundling the Kinect Microsoft have given the device a future, Sony have pretty much ensured that their camera and Move will never be fully supported by developers as has always been the case for peripherals, when the userbase is fragmented developers won’t risk the developement costs and in the current climate I think that is even more true.

I disagree on your first point. People line up to drop $500+ on the newest ipad on an annual basis and don’t think twice about it. $399 and $499 isn’t that bad, considering what you get for the money. They aren’t going to $299 for at least 2 years while they attempt to recoup some of the R&D costs for each box. I totally agree with you on your second point. Gamers are a conservative bunch and fight change every step of the way. M$ tried to bring some change to gaming with games in the cloud (for which they needed DRM) and kinect. Developing for Kinect in particular is wide open now as developers know EVERY box will have that add-on.

I am still interested to see what happens to software prices in the next gen. Many game developers have already said the cost to produce software is 10-15% more expensive, and that cost will surely be passed onto the consumer. Many studios and publishers went out of business in the current generation, and even Sony did not perform well over the life of the PS3 and now the Vita.

The big question is will these consoles go to market before November 5th, the day Call of Duty: Ghosts is released. If they do not, expect very small install bases on the new consoles as everyone will buy and play the game on their current console.

I don’t believe for a second that it will be more expensive to develop. Both consoles are now x86 based, meaning a larger amount of code will be able to be used across all platforms: PC, PS4, and Xbox One. The PS3 was extremely difficult to code for, and that is no longer the case.

At the end of the day software like any price elastic good is priced at the point where the developer thinks they maximize profit. Developer costs really only factor into the equation in terms of whether they can even make profits. In other words if they thought they could make a higher overall profit selling Xbox360 games for $100 each or $5 each… they would do it…… regardless of the actual development cost.

My prediction is we are going to continue to see AAA titles increase in price (with a few like CoD/Halo/etc at $70 by end of 2014). Not because of development costs…. but because no matter how much internet hate there is for CoD always being the same for example…. people still flock to buy it and it has the demand (likely at an even higher price). I imagine at the same time we will continue to see the growth of indie smaller budget developers offering titles online for very reasonable prices (and in many cases for very quality games).

your very funny hahahaah halo is dead hahaah cod is on ps4 and have you heard of The last of us, Uncharted,God of War BEYOND: Two Souls,infamous. gran turismo LIKE YOUR A DUMMY HAHAHA but lets be real your a fanboy i have both and SONY HAS BETTER GAMES HANDS DOWN. and you need to check again. PS4 HAS SOLD OUT OF DAYONE PRE ORDERS YOU DUMMY HAHAAH xbox fanboys are so funny PS4 is selling more everywhere i was at gamestop the other day and the manger told me that they only have 8 preorders for the xbox one and they have about 67 for the Ps4 im a gamer and not a fanboy Ps4 has better hardware and its 50% more powerful and the have Gaikai TOUCH PAD im done playing just first person shooter i like AAA GAMES WHICH SONY ALWAYS WINS Uncharted had 25 perfect scores it was Game of the Year and the last of us is the best game ive ever play i have an xbox i waited in line for halo and it was not that good i play cod way more . MY BORTHERS ARE XBOX OWNERS ONLY and they called mr from NewYork last week and said yea where getting Ps4 so yea its over ms is done ill buy a used xbox one someday maybe? OH AND THERES NO LAG ON PSN SO TO ME XBOXLIVE IS NOT BETTER THERE ALWAYS TRYING TO SELL YOU SOMETHING LIKE AXE. RIP MS

Sony’s decision helped to secure my order for two reasons: 1. I’m not a huge fan of wave-your-arms-and-jump-around games. I get my exercise elsewhere, and while these physical games are great fun at parties, most of the time I’d rather be sitting down with a standard controller. By not making the camera standard, Sony insured that developers would put extra effort into making their games playable with a standard controller. 2. Hey, it’s a hundred bucks cheaper!

Who cares about price? If you are talking about core gamers-the XBOX will win this battle. Quality over quanitity. PS4 has always had only about 2-3 good games per year-Uncharted, Last of Us, ???, wheras XBOX consistenly puts out quality games-Forza, Halo, Skyrim, etc. $100 isn’t anything when you cinsider spending hours in front of a console looking at premium graphics. Microsoft has to make money somehow to stay in business. Throw in a Kinect-great! PS4 buyers will end up spending that money somehow, they just haven’t announced it yet. I have ordered my XBOX..Amazon has XBOX in the lead easily…

Skyrim was on PS3 too sir. So basically you gave equal examples. Amazon has the Xbox One in the #1 spot since their reversal announcement, but if you keep on going down the list, the ps4 and its bundle iterations fill out the rest of the top 10. So no, the xbox 1 is not leading by any stretch. Every other retailer has been reporting ps4 preorders far exceeding. Keep on trying fanboy.

most good games anymore are on both consoles, you mention skyrim even, which was on both…

so I don’t see that really being an issue… Halo 4 was the worst of the series so far, so I’m not staying for that, forza is great but I always liked grand turismo too… what else does xbox have? gears? judgement was weak I thought…

Last of Us is probably the best game of the year so far…

I would agree with you, if this was 4 years ago, but Sony has really been catching up…

How does Xbox win the battle for core games when the PS4 has 50% more raw power? If you want the “premium graphics” you say are important, don’t you think that’s going to matter? Developers are already talking about games running 30fps on xbox and 60fps on PS4.

You argue “Quality over Quantity”, then criticize Sony for not having enough good games… If you’re talking Quality, Uncharted easily surpasses Forza and Halo. And Skyrim? It’s on both consoles.

Halo? Meh. Destiny makes that irrelevant to everyone but the fanbois. Your analysis of Amazon sales is also effected by your fanboi glasses. PS3 has 3 models in the top 7 of their best seller list, versus only one from microsoft.

Your “50% more raw power?” claim is silly speculation based on only partially known specs and silly assumptions.

“PS4 and Xbox One power difference is minimal, says Kojima” http://www.videogamer.com/xboxone/metal_gear_solid_5_the_phantom_pain/news/ps4_and_xbox_one_power_difference_is_minimal_says_kojima.html

“Need For Speed dev: PS4 and Xbox One are ‘going to be pretty much the same” http://www.videogamer.com/ps4/need_for_speed_rivals/news/need_for_speed_dev_ps4_and_xbox_one_are_going_to_be_pretty_much_the_same.html

your very funny hahahaah halo is dead hahaah cod is on ps4 and have you heard of The last of us, Uncharted,God of War BEYOND: Two Souls,infamous. gran turismo LIKE YOUR A DUMMY HAHAHA but lets be real your a fanboy i have both and SONY HAS BETTER GAMES HANDS DOWN. and you need to check again. PS4 HAS SOLD OUT OF DAYONE PRE ORDERS YOU DUMMY HAHAAH xbox fanboys are so funny PS4 is selling more everywhere i was at gamestop the other day and the manger told me that they only have 8 preorders for the xbox one and they have about 67 for the Ps4 im a gamer and not a fanboy Ps4 has better hardware and its 50% more powerful and the have Gaikai TOUCH PAD im done playing just first person shooter i like AAA GAMES WHICH SONY ALWAYS WINS Uncharted had 25 perfect scores it was Game of the Year and the last of us is the best game ive ever play i have an xbox i waited in line for halo and it was not that good i play cod way more . MY BORTHERS ARE XBOX OWNERS ONLY and they called me from NewYork last week and said yea where getting Ps4 so yea its over ms is done ill buy a used xbox one someday maybe? OH AND THERES NO LAG ON PSN SO TO ME XBOXLIVE IS NOT BETTER THERE ALWAYS TRYING TO SELL YOU SOMETHING LIKE AXE. RIP MS

you have a valid point but I think you are also forgetting, most people tend to already have a entertainment system, I have a blue ray player, a surround sound system, a computer, a laptop, and I think most people have that already using the xbone as your main entertainment device is well meh, and all my things hook up to my TV w/o me having to switch plugs and the ps4 im sure will have all the same features but the entire point is sony knows who the market is and that is gamers, MS wants it to be everyone and the problem with MS is, a average customer wont know about all their stupid restrictions and when they buy it and find out well they might not have what is required

It’s 33% more raw power, not 50%, and that is Speculated with a capital S.

The operating frequency of the Xbox One’s GPU is currently unknown, it is speculated to be running at 800mhz based upon “leaked” and unverifiable information which would put the system at a 33% performance disadvantage.

However for all anyone knows it could have an operating frequency of 1000mhz which would make it every bit as powerful as the PS4 with less shader cores.

When it comes to the ram GDDR5 is not faster, it just works differently. DDR3 is actually faster memory and has tighter timings, however it has a lower bandwidth threshold.

GDDR5 is slower, has looser timings and latency issues however it has roughly an 80% increase in bandwidth capability.

They both have advantages and disadvantages, you can’t just sum them up as one is better than the other, it’s not true, it all depends on the applications being used.

The Xbox has 33% less power, the PS4 has 50% more power. It’s the same math, depending on which you reference first. 1.84 tflops vs 1.23 tflops. (1.23 is 66% of 1.84, hence the 33%. But .61 is 50% more than 1.23, hence the 50% more.)

DDR3 has lower latency, but GDDR5 is obnoxiously faster, especially when supplying data to a GPU… which is it’s main function here. Unless you’re telling us you know better than all of the guys at AMD and Nvidia who make pc graphics cards for a living.

You can easily say one is better, when it clearly is. I understand from your previous comments that your an ms fanboi, so it must hurt you. And before you accuse me of being a Sony fanboi, I’m a PC fanboi. I will be playing the same games on far superior equipment at higher resolutions, higher framerates, and enhanced graphics settings.

You’re just an idiot and I’m never looking at this discussion again, you’re trying to pass off speculations as fact, it’s pathetic. And no I am not a Microsoft fanboy I just believe in presenting things as they are and you can’t seem to do that, you take speculated data and pass it off like it’s confirmed set in stone information, well it’s not.

Well I understand your argument I actually side with IGN on this one for the reasons they’ve stated. As of now I consider the Kinect the only really difference between the two consoles and MS should be playing this up as a huge advantage. Frankly, if they decided to cut the Kinect out of the bundle the XB1 would lose half of its appeal for me. I probably wouldn’t bother purchasing the camera either because I’m convinced that developers will not do anything compelling with the device until they know that there is one attached to every XB1

Well I mean it’s not you personally, I know there are a bunch of different writers but it’s like a warpath against Microsoft with the message coming across on this website, overall it comes off as heavily biased.

Forbes is not Anti Microsoft there were the ones making a bunch of articles just right out of the E3 stating why you should get an xbox one and seeming to have anti issues with the PS4. now that they have made a few articles now supporting the PS4 now everyone seems there Anti Microsoft. I guess Forbes has seen the light unlike the Montley fool articles on yahoo that keep worshiping the Xbox one still.

“Compelling software will only arrive after PlayStation 4 camera adoption.”

This statement assumes that compelling software is even possible for what is essentially a gimmick device. In all the years that Microsoft had Kinect for the 360 I never saw anything produced that could even be moderately construed as “compelling.” More appropriate adjectives would be novel, creative, and forgettable.

The bottom line is this, a lot of people do not really care about all those extra features that companies throw at us. I am a college student, live with kids. Everyone i know has either a 360 or PS3. No one cares about a dam camera! I want the best gaming console! not the best “everything” console.

i have been playing xbox since the real one and sony since ps1 i have a 360 and ps3 i like both but ms seems to have to many dumb movie apps and tv and music im a gamer so ps4 is all for me bye ms halo was the only good game u guys had

Have to disagree completely here. The fact is “When that consumer is making tough holiday buying decisions” they are not going to see either of these consoles on the store shelves. There is little doubt both systems will have severe shortages through the holidays as each sell all they can produce.

The difference of course is going to be MS is in all likelihood earning higher profit margins while at the same time building a large install base for the Kinect camera (giving incentive to developers to make use of it).

Six months down the road when supply constraints are easing I imagine we will see MS lower price to be near near parity with PS4…either giving option of purchasing just system without connect for 399 or keeping bundled as it is and lowering price to a much smaller premium over PS4 at $429 to $449.

In either case I think MS has made a very smart move with pricing (maybe the only good move they have made so far). It is very easy for them to lower the price later they cannot realistically raise it though. Only makes sense to rake in that extra margin when demand is going to be through the roof.

This assumes that games are actually better with Kinect. Aside from Dance Central, I have yet to see this be the case. Steel Battalion shows the exact opposite actually with at least one reviewer simply refusing to finish the game.

The argument that the Sony camera won’t sell without significant developer support has already been proven wrong. After all, how many of those silly plastic musical instruments were sold to play one Guitar Hero or Rock Band game. If (and I won’t say it will with any certainty) one or two really original or compelling games come out that use the camera, gamers wont hesitate to pay a reasonable price for it. It won’t need a huge library of games or even a medium sized one.